Capturing value in a structurally constrained commercial aerospace market
A maintenance, repair, and overhaul (MRO) super-cycle is underway. Despite recent aircraft-production growth, the commercial aerospace sector continues to see supply chain bottlenecks cause a significant ripple effect in the industry. MRO demand is being driven by higher aircraft utilization and an aging global fleet requiring more intensive maintenance. This Viewpoint outlines the current conditions and supports a case for investors to back a strong MRO platform with high revenue potential.
The first half of this decade has been rife with challenges for the commercial aerospace supply chain. The COVID-19 pandemic and its aftermath left suppliers with irreversible losses on deliveries, while ongoing geopolitical conflicts have caused further disruption.
The existing delivery shortfall for new aircraft totals approximately 5,300, and the order backlog has surpassed 17,000. Historically, order backlogs have hovered between 30%-40%; the current backlog equals nearly 60% of the active fleet (see Figure 1). Given the current limits on production capacity, it would take nearly 13 years to fully clear the backlog.
Starting in 2026, deliveries of new aircraft are expected to grow steadily (see Figure 2). However, global passenger air travel growth has impacted demand for new orders, which will continue to outstrip supply of aircraft delivered. The mismatch between aircraft demanded by airlines and production capacity is unlikely to resolve before 2031–2034 due to irreversible losses on deliveries over the past five years, combined with a record-high order backlog.
The bottleneck is compounded by timeline issues with engine production, which lags airframe production. The need for replacement engines and spare parts is driven largely by a record number of engines undergoing maintenance at any given time, while ongoing supply chain disruptions continue to constrain production rates.
A manufacturing defect in the geared turbofan engine, announced by Pratt & Whitney in 2023, further exacerbated the issue. The unintended use of contaminated powder metal resulted in about 600-700 engines requiring inspection between 2023–2026; an additional 720 Airbus A320neo aircraft were grounded or stored. Newly completed airframes are being parked until engines are available. In 2025, the share of aircraft parked for over five years reached 4%, a historic high, compared to about 2% between 2015–2018 (see Figure 3).
The inability of aircraft OEMs to meet delivery targets led to airlines flying older aircraft, over longer spans of time, to serve the growth in global passenger air traffic. In 2025, the average global aircraft fleet age rose from a historical average of about 13 years pre-pandemic to approximately 15 years (see Figure 4). These older aircraft require a higher level of maintenance to remain operational, thus driving up demand for ongoing assessments and repair services.
In 2024, global fleet utilization reached a record high. ATK (average available tonne-kilometers) per active aircraft reached 54,000 in 2024, compared to a historical average of 47,000 between 2010–2018 (see Figure 5). More frequent use of aircraft and engines increases MRO demand.
Meanwhile, the backlog of new orders climbed to the equivalent of nearly 13 years of production at current rates in 2024, compared to a historical average of about nine years of production pre-pandemic (see Figure 6). Because new orders are taking longer to fulfill, the need for airlines to keep older aircraft flying will likely persist in the near term.
The combination of increased aircraft utilization and an aging fleet is expected to persist until 2031 and beyond, allowing MRO providers to engage with a demand super-cycle over the next five-plus years.
While OEMs participate in the aftermarket, supply scarcity suggests they are likely to prioritize new aircraft production over aftermarket support. This focus creates pathways for independent MRO providers to meet demand that OEMs lack the capacity to fully address.
However, MRO providers may struggle to manage surging demand, mainly due to skilled labor gaps and parts shortages. Workforce retirements, combined with an estimated 10% shortfall of newly certified technicians, have created labor gaps in some markets. Globally, Boeing estimates a need for 710,000 new maintenance technicians by 2044 to support fleet growth and replace retirees. Longer lead times and scarce new spare parts are also stretching turnaround times. In this environment, MROs’ ability to capture the super-cycle will hinge on how quickly they can address constraints and expand capacity.
Adopting AI-powered advanced manufacturing technologies can help MRO providers navigate a range of challenges. AI algorithms leverage big data from aircraft health-monitoring systems to detect subtle trends and anomalies that humans might miss. Maintenance processes can then shift from reactive to proactive, preventing unscheduled grounding events and reducing costly downtime.
Providers should consider tools such as intelligent inspection systems, predictive analytics, and maintenance planning, which may lessen the impact of skilled labor shortages. Per Arthur D. Little (ADL) analysis, many providers have already implemented AI-driven analytics to proactively address component failures. Our analysis also found that predictive and condition-based maintenance is the leading area of AI adoption for MRO providers. Lufthansa Technik and Rolls-Royce employ data-focused AI to flag issues early, which minimizes disruptions and improves engine reliability.
MRO providers should also explore solutions presented by usable serviceable material (USM) to increase their parts inventory. USM, which comprises serviceable aircraft parts reclaimed from retired or disassembled aircraft, offers some significant potential advantages:
The flexibility of USM has shifted it from a niche option to a strategic necessity, as airlines and MRO providers are increasingly sourcing materials to keep fleets operational when new OEM spares are delayed or too expensive.
Commercial aerospace MRO providers face a rare, multiyear opportunity driven by the convergence of the factors outlined above. To position for growth, MRO players will likely require capital to invest in technologies and their workforce to scale capacity. For investors, the prolonged demand super-cycle offers an opportunity to back well-positioned, scalable, digitally enabled MRO platforms while benefiting from the sector’s defensive recurring revenue profile.
The following investment thesis outlines why investors should consider entering this market:
To identify the right assets for meeting growth ambitions and value creation plans, investors should conduct commercial due diligence on target MRO companies to address the following issues:
Current market conditions are extending beyond a temporary imbalance; they are pointing to a structural reconfiguration of demand in the aerospace aftermarket. Sustained pressure on fleet availability is driving an increase in maintenance intensity and the demand for parts and materials. Several factors within this context underpin a compelling investment case for MRO:
By Brennan Foo, Arnaud Bodji, Daniel Chow, Felix Wu, Mathieu Blondel, Matthew Davy
cloud technology
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